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HB539 INTRODUCED
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HB539
5VXW53M-1
By Representative Robbins
RFD: State Government
First Read: 03-Mar-26
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5VXW53M-1 02/24/2026 DJ (L)DJ 2026-758
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First Read: 03-Mar-26
SYNOPSIS:
Under current law, a municipality, a county, or
a public industrial authority may abate the state and
local portions of certain taxes.
This bill would require the recommendation of
the Secretary of Commerce and approval of the Governor
for a municipality, a county, or a public industrial
authority to abate the state portion of these taxes.
This bill would make technical corrections.
A BILL
TO BE ENTITLED
AN ACT
Relating to abatements; to amend Section 40-9B-5, Code
of Alabama 1975, to prohibit a municipality, a county, or a
public industrial authority from abating the state portion of
certain taxes unless the abatement is recommended by the
Secretary of Commerce and approved by the Governor; and to
make technical corrections.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. Section 40-9B-5, Code of Alabama 1975, is
amended to read as follows:
"§40-9B-5
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"§40-9B-5
(a) Subject to the geographical or, jurisdictional , or
other limitations specified in subsections (b), (c), and (d),
the governing body of a municipality, a county, or a public
industrial authority may grant abatements of allthe non-state
portion of the taxes allowed to be abated under Section
40-9B-4 with respect to private use industrial property.
(b)(1) The abatements authorized to be granted pursuant
to subsection (a) for construction related transaction taxes
and for ad valorem taxes for a period not to exceed 10 years
may be granted:
a. By the governing body of a municipality, except as
otherwise provided herein, with respect to private use
industrial property located within the limits of the
municipality or within the police jurisdiction of the
municipality; provided, however, if a municipality has a
corresponding municipal tax, the municipal governing body may
only grant an abatement of a county tax if the municipality
has also abated the corresponding municipal tax, or, if the
municipality does not have a corresponding municipal tax, the
municipal governing body may abate a county tax only if the
governing body of the county, by resolution adopted by a
majority of its members, has authorized the municipality to
abate the eligible county tax described in the resolution .;
b. By the governing body of a county, with respect to
private use industrial property located in the county and not
within a municipality or the police jurisdiction of a
municipality, unless consented to by resolution of the
governing body of the municipality .; or
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governing body of the municipality .; or
c. By the governing body of a public industrial
authority, except as otherwise provided herein, with respect
to private use industrial property located within the
jurisdiction of the public industrial authority; provided,
however, if the municipality has a corresponding municipal
tax, a municipal public industrial authority may grant an
abatement of a county tax only if the municipal authority has
also abated the corresponding municipal tax or, if the
municipality does not have a corresponding municipal tax, the
municipal authority may abate a county tax only if the
governing body of a county, by resolution adopted by a
majority of its members, has authorized the public industrial
authority of the municipality to abate any eligible county tax
described in the resolution.
(2) The abatements authorized to be granted pursuant to
subsection (a) for ad valorem taxes for a period longer than
10 years may be granted:
a. By the governing body of a municipality, with
respect to private use industrial property located within the
limits of the municipality or within the police jurisdiction
of the municipality, but only as to municipal noneducational
taxes.;
b. By the governing body of a county, with respect to
private use industrial property located in the county, but
only as to county noneducational taxes .; or
c. By the Governor, with respect to private use
industrial property located in the state, but only as to state
taxes.
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taxes.
(3) The governing body of a county and a municipality
may separately authorize one or more public industrial
authorities to provide by resolution for such consent on its
behalf.
(3)(4) Notwithstanding the provisions of this
subsection, abatements authorized to be granted pursuant to
subsection (a) for data processing centers may be granted in
accordance with subdivision (1) without regard to the time
limitation stated in subdivision (1).
(c) If a tax is abated pursuant to this chapter, any
payment, contribution, or other financial or in-kind award
received from a private user or related party shall be divided
between the county and municipality whose taxes were abated
based upon the tax proceeds which would have been paid if the
taxes had not been abated, unless the party receiving such
award can prove that the award was not related to the granting
of any abatement. In addition, any county or municipality
whose taxes are subject to abatement as provided in this
chapter, by resolution adopted by affirmative vote of a
majority of its members, may elect to waive the requirements
of this subsection.
(d) Any abatement of county taxes granted by a
municipality or municipal industrial authority shall not be
valid until the expiration of : (1)(i) 10 days following the
date of physical delivery to the county commission ; or (2)(ii)
13 days following the date of mailing by certified mail to the
county commission of a copy of the resolution granting such
abatement. Proof of delivery by affidavit of service, in the
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abatement. Proof of delivery by affidavit of service, in the
case of physical delivery, or by certified mail receipt, in
the case of mailing by certified mail, shall be furnished to
the Department of Revenue at the same time as the filing of
the abatement agreement under Section 40-9B-6. If the
procedures herein prescribed are followed, any such abatement
shall be effective as of the date granted.
(e)(1) The governing body of a municipality, a county,
or a public industrial authority may grant abatements of the
state portion of the taxes allowed to be abated under Section
40-9B-4 with respect to private use industrial property only
upon recommendation of the Secretary of Commerce and approval
of the Governor, as provided by this section.
(2) A municipality, a county, or a public industrial
authority seeking to grant an abatement of state taxes shall
request the abatement in writing to the Secretary of Commerce,
which shall include the taxes proposed to be abated, the
duration of the abatement, and a proposed fiscal analysis of
the tax loss and revenue generated.
(3) The secretary shall review the information provided
in subdivision (2) to:
a. Determine if the project meets any criteria set by
the Secretary of Commerce, including return-on-investment; and
b. Confirm if the company, or any related company, has
defaulted on a project agreement or similar agreement or any
economic incentive agreement at any time during the last ten
years.
(4) After the review in subdivision (3), the secretary
may recommend the abatement of the state taxes to the
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may recommend the abatement of the state taxes to the
Governor. After receipt of a recommendation, the Governor may
approve or disapprove the abatement.
(5) The secretary shall forward notice of approval or
disapproval of the abatement to the applicable local taxing
authority within 30 days of the action. "
Section 2. This act shall become effective on October
1, 2026.
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